Carbon Motors Denied Government Loan for Building Its E7 Police Car

Carbon Motors, the company working on a very cool purpose-built police car, has been denied its request for $310 million in Department of Energy loans. Like Fisker Automotive, Carbon had applied under the DOE’s Advanced Technology Vehicle Manufacturing program, which was initiated under President George W. Bush.

Justin Berkowitz

Mar 9, 2012

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Carbon Motors, the company working on a very cool purpose-built police car, has been denied its request for $310 million in Department of Energy loans. Like Fisker Automotive, Carbon had applied under the DOE’s Advanced Technology Vehicle Manufacturing program, which was initiated under President George W. Bush.

When the DOE canceled Fisker’s loans, company boss Henrik Fisker said his firm was being used as a “political football” in an election year. That Carbon’s loan application was denied a week later just underscores the point. General Motors and Chrysler, as well as Aptera and several other startups, have also had their loan applications denied since a scandal broke with a DOE-funding solar energy company called Solyndra. Many members of Congress are eager to position themselves as fiscally responsible, and saying they are reducing the government’s expenses by hundreds of millions of dollars may impress their constituents.

We believe that Carbon Motors now is seeking private sources of funding so that it can proceed with plans to build the E7 police car. The company is prohibited by law from commenting on its fundraising efforts, but a statement posted on its web site said “Carbon Motors will continue the fight.”

This writer feels that these politicians are making an enormous mistake. Carbon and Fisker both presented solid business plans to produce new, fuel-efficient vehicles in the U.S. A major percentage of research and development in many high-tech fields depends on government assistance—which, unlike these loans, often come in the form of grants—and the alternative-propulsion auto industry should be seen the same way. Carbon Motors makes a particularly compelling case, since the car it is planning to build will be sold exclusively to publicly funded police departments. If the E7 police car delivers on Carbon’s promises that it will be safer for police, have lower running costs, and last longer than converted passenger cars, it would result in bigger financial savings for taxpayers down the road.